The luxury watch industry is hanging by a thread. New technologies such as smartwatches are flooding the market, and consumers are spending their money on these new inventions rather than purchasing a thousand dollar watches. But with the COVID pandemic, what has been its impact on top watch brands?
Supply chains cut off way before
Most people don’t realize that the supply chain for watchmakers worldwide has been cut off way before the first wave of cases hit. In early February, when China is at the peak lockdown and quarantine, most of the needed materials like stainless steel, sapphire crystal, and other bolts and nuts essential in making movements were delayed in shipping.
This meant that manufacturers the world over had experienced problems with logistics way before the virus spread. China is one of the most powerful countries on the planet, with a supply and logistic power that’s up there with top raw materials importers when the novel coronavirus was first reported in December of 2019, that alone put luxury watchmakers’ sales for the next year in a precarious situation.
When the pandemic hit full force, popular models like the Royal Oak Offshore from Audemars Piguet, Omega’s Seamaster 300m, and Rolex’s GMT have seen a decline in interest as well as sales, with impending sales to be carried on for the next months or so being pulled out by consumers. In the background, uncertainties on the watch industry’s most significant events start to become apparent, and in the next few weeks, it unfolded like an avalanche.
Sales in China diminished
It goes on without saying that China is the major consumer of luxury watches in the world. Last year alone, more than 40% of the total sales of luxury timepieces came from the country. The projections were high and positive in 2020, as it is the start of the decade and the renewal of the 12-year zodiac calendar. Experts expected luxury watchmakers to have a field day because Chinese people were bound to buy items for prosperity.
But with the Covid-19 pandemic, in the first three months alone of it ravaging Central China, sales have gone kaput in some retailers. In Wuhan, where the virus is believed to have started, the total lockdown meant a complete freeze on some 19 million-plus people’s economic activity.
Swatch Group canceled the “Time to move” event
Some of the industry’s significant events annually are held in the first two quarters of the year. These events are expected to pull in significant interest and sales and after-sales services. But on February 4, one month before the event, Swatch Group announced that they are canceling the “Time To Move” fair where some of the best Swiss watch brands have previously notified to show.
The “Time To Move” event was supposed to showcase new collections from several Swiss big names like Breguet, Blancpain, and Glashutte Original. The summit was supposed to connect significant retailers to the press, to get the word out of new timepieces for this year. Since the event is held earlier than the stalwart Baselworld, it should have given the participating brands a leg up on the watches launched a month or two later.
Baselworld got postponed
Baselworld is the premier summit for the watch and jewelry industry. It’s usually held in the second quarter of the year, with thousands of enthusiasts, celebrities, and brands coming together to celebrate a great year, launch new product lines and technologies for the coming years.
Grand Seiko, the Seiko Corporation’s luxury arm, has withdrawn beforehand, but it seems like organizers are still trying to make the event happen as late as February 15. Four days before that, Bulgari had also pulled out of the show, citing “travel restrictions” as a reason. The last day of February saw Switzerland’s Federal Council ban gatherings of more than 1000 people due to the virus. A few hours after that, organizers for Baselworld announced its postponement.
Takeaway
The Covid-19 pandemic brought the world down to its feet. While we are quarantining and making sure that our hospitals aren’t overwhelmed, washing your hands with soap for twenty seconds is one of the most effective ways of keeping healthy. As per the luxury watch industry, it seems like it needs to have a miracle to bounce back.
About The Author
Nicole Hinton
Nicole is a freelancer & passionate blogger. She has 4+ years of experience in digital marketing and specialize in content writing, content marketing and organic search engine optimization. She has worked with many brands from Canada as well as the USA. Currently, she manages content marketing team of freelancers and doing their business efficiently.
